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The UK will start a 7-year phase-out of the Common Agricultural

Farmers May Find Flood Protection a Grass-Roots Initiative

Feb 2020

The UK will start a 7-year phase-out of the Common Agricultural Policy’s Direct Payments to farms from 2021[1], as a new Agriculture Bill changes the basis upon which payments are made, rewarding those farms that deliver public benefits such as soil improvement, rather than awarding funds on the basis of how much land is farmed.

The Agriculture Bill is said to be one of the most important pieces of legislation affecting the farming sector for 70 years, with its aim being to inspire innovation and assist environmental protection. It will offer a thorough response to climate change – something farms so dramatically flooded in 2019 have suffered from in distressing ways.

Those farms, although typically insured for damage caused by the floods, have required additional support. A £2m Flood Recovery Fund, established in 2019 to support farms in North Yorkshire and Lincolnshire, has this month (January 2020) been boosted and now has £4m to share out amongst 2019’s flood-hit farmers in Worcestershire, Derbyshire, Nottinghamshire, South Yorkshire and Gloucestershire.[2]

Chief Executive of the Rural Payments Agency, Paul Caldwell, has highlighted that “while insurance will pay out for the majority of the damage”, the fund will enable affected farmers to pay for unexpected projects and farm restoration work, including fence rebuilding and the creation or repair of stone walls. Applications need to be made by March 31, 2020[3] by North Yorkshire and Lincolnshire farmers and by July 31 for those in the counties covered by the extension. The application form allows farmers to apply for a grant of between £500 and £25,000, to put right any uninsurable damage suffered.

By focusing on better land management and environmental protection, the Agriculture Bill seeks to transform the farming landscape, reversing impacts such as soil erosion. Degraded land is struggling to retain water and is increasing the speed in which it flows into ditches, streams and rivers, contributing to flooding. Washing nutrients and recently applied organic materials with it, this run-off water is also having negative impacts on lakes and rivers.[4]

Whilst the Bill is not all about erosion, flooding and water quality, with its sights also set on better air quality, improved animal welfare standards, enhanced wildlife protection, and food supply security, images of flooded fields bring key climate change messages home. New methods and innovations will contribute to a drive to decarbonise agriculture, to help meet the Government’s net-zero emissions target by 2050, whilst reversing some of the impacts of climate change on the land.

There will be no overnight fix, so farms should consider the risks they face from perils such as flooding. With hotter summers, and the moorland fire incidents already witnessed in recent years, fire risks also need to be considered when determining levels and types of cover. Factors like these can disrupt a farm’s business plan and operation, making business continuity insurance another area to mull over, but there are many other risks to consider too.

If your farm needs to get the right insurances in place, to cover existing core perils and new risks that may emerge because of climate change, innovation and evolving methods of farming, you would be advised to talk to a broker who understands agricultural insurance. If you need to source someone who can focus on your farm and tailor cover to suit it, please use our ‘Find a Local Broker’ tool.